Blue Cross limitations on service are upheld in no fault claim by Spectrum
Farm Bureau sued Blue Cross Blue Shield and Spectrum Health to avoid paying for skilled nursing services provided to a Farm Bureau insured who was injured in a car accident. The injured woman had Blue Cross coverage that required her to get approval for skilled care after 14 days; she also had "coordinated" no fault benefits that required her to exhaust her Blue Cross coverage before Farm Bureau paid for any medical. When she was maintained at Spectrum beyond the initial 14 days without Blue Cross approval and without promising to pay on her own, Farm Bureau argued that it was relieved of any duty to pay for the services.
The Court held that the pre-authorization limitation in the Blue Cross contract was enforceable and that it also released Farm Bureau from any obligation to pay for skilled nursing. Since Spectrum's contract with Blue Cross limited Spectrum's capacity to pursue non-authorized benefits from the injured patient, it also released her auto insurer, regardless of the propriety of Blue Cross' initial denial.